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Social outcomes did not improve much in the nineties... Poverty declined from 43% to 39% Extreme poverty from 16.8 to 15.6% Inequality increased by 2 Gini points Average unemployment increased from 7% in 1990 to more than 10% in 2000 The share of unregistered jobs did not decline

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Are reforms to blame? By the mid nineties: Rising contention but lack of hard evidence. RES worked with micro data that was increasingly available but hardly used Major contributions in measuring reforms & in assessing their effects

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Findings—Trade Reforms Link between trade reforms and inequality & poverty is still the focus of intense research Behrman, Birdsall and Székely find trade reforms did not increase inequality or poverty during the 90´s Using pooled household survey data for LAC

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Findings—Trade Reforms Link between trade reforms and inequality & poverty is still the focus of intense research Evidence for skill-biased technological change (Colombia, Brazil, Colombia) Reduction of tariffs related to initial pattern of protection with lower-skilled more protected (increasing inequality) (Mexico, Argentina, and Ecuador) Growing consensus that overall the effect of the trade reforms on the wage distribution are small

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Findings—Trade Reforms Trade reforms cannot seemingly be blamed for rising unemployment. Effects on total employment or on unemployment are very small Effects on employment reallocation also surprisingly small But some adverse effects in manufacturing employment in Brazil and Uruguay (not in Mexico)

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Findings—Trade Reforms And measured effects on quality of jobs are so far small Some in Colombia No effects in Brazil or Ecuador But evidence that wages declined

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Ongoing research How to explain rising U? Is it cyclical or structural? Is lower inflation to blame for low wage adjustment? What is the role of institutions and policies? Role for training, intermediation What explains cross-country differences?

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Ongoing research Why is wage inequality on the rise? What is the role of IT? What is the role of capital imports? What implications for skill formation policies? What to do about it?